BYD is to build Tesla-like gigafactory

Chinese electric bus and car manufacturer BYD says it’s planning to expand battery production increasingly fast( they made a promise that the output will icrease so fast that it will almost match the planned output of Tesla’s Gigafactory by the time it’s fully operational in five years).

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The Shenzhen-based maker of e6 electric cars and K9 electric buses wants to more than double its battery production output this year, from 4 gigawatt hours (GWh) to 10, continuing at that pace for at least three years.

*A GWh is a massive unit of electrical energy (equivalent to 1 billion watt hours) used to measure a battery maker’s annual production output.

"We have demonstrated that BYD is capable of adding 6 GWh every year with strong market demand," Matthew Jurjevich, spokesman for BYD's U.S. unit, said in an interview with Reuters published on Friday. At that pace of expansion, BYD could have 34 GWh of capacity by 2020 from its factories the same year Tesla’s $5 billion Nevada factory is scheduled to be charming out 35 Gwh.

Tesla and Panasonic partnership

The Fremont, California, maker of the Telsa Model S luxury electric car is working with Japan’s Panasonic Corp. to rapidly expand its battery supply. A vital component of Tesla CEO Elon Musk’s plan to produce a sub-$35,000 Telsa electric car is to install an annual capacity to make billions of small high-energy 18650 Li-ion cells. It takes thousands of these batteries, each a little larger than a standard AA, to make one of the energy storage packs that power the Model S.

Gigafactory

Gigafactory is said to output more lithium-ion batteries than the entire world’s capacity today. When fully operational in 2020, these two plants alone will triple global Li-ion battery production capacity, and that's not accounting for the largest electric vehicle battery supplier today, LG Chem, who broke ground on their own Chinese gigafactory in late 2014.

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Can BYD compete with Tesla?

The companies are fast emerging as two of the key players in the nascent electricity storage sector. Storage technology is considered critical to integrating large amounts of renewable energy because it can absorb excess power from wind farms or solar panels and keep that for use when conditions don't allow for power generation.

The sector has attracted Tesla, BYD and a range of startups as well as stalwart battery manufacturers and is expected to grow to $1.5 billion by 2019 from $128 million in 2014 in the United States alone, according to GTM Research.

BYD, which declined to provide investment budgets, ended last year with 4 GWh of capacity and will be at 10 GWh later this year. The U.S. energy storage market is expected to triple this year to 220 MW, according to GTM.

Most of BYD's production is in China, but the company is opening a major new factory in Brazil this year that will contribute meaningfully to output next year, Jurjevich said.

BYD, which started out making mobile phone batteries, will also scale up manufacturing in the United States as demand for its batteries increases, he added.

According to data published last year by Lux Research, BYD is the sixth-biggest manufacturer of batteries for hybrid and plug-in vehicles. Panasonic Corporation, which makes cells and batteries for Tesla, is the biggest.

Tesla has said it will launch its own production of battery cells in Nevada in 2016 and reach 35 GWh of capacity by 2020. Tesla does not currently produce battery cells, according to a company spokeswoman.

BYD opened two manufacturing plants in Southern California in 2013 to produce both electric buses for public transportation and batteries.

The company shocked many in 2003 when it launched its automotive business and has since become one of China's most successful automakers. Outside of China, however, it has focused on selling buses rather than cars.

BYD plans to deploy 70 megawatt hours of projects in that market in the United States this year, and has another 130 MWh of projects in its U.S. pipeline.

It has already deployed 40 MWh of projects in North America with customers including Chevron Corp and Duke Energy Corp.

*Do you think that BYD can comepte with Tesla?Will there be more players on this market by 2020?